The star has donated the full amount of his £25k award cash to the Music Venues Trust, which functions to protect the UK's independent live music spots.
Fender was awarded the cheque on mid-October as his third album his work was declared the best record of the last 12 months.
He has chosen to give the cash to the trust, in recognition of the vital role small stages played in his initial steps.
"I would not have achieved my current career if it hadn't been for all the performances I did around the region, and beyond, when I was beginning," remarked the artist. "These venues are legendary, but they are in difficulty."
Beginning in 2023, over 150 of these venues have shut down – roughly one-sixth of the entire UK sector.
Recently, well-known musicians such as Pulp, Coldplay, Katy Perry and Ed Sheeran have all backed the MVT in its initiatives to help venues survive, by adding a modest fee to their ticket prices, which supports local stages.
Sam Fender also participated, generating more than £100,000 on his recent tour to support 38 grassroots venues across Britain.
The donation supported spaces that were confronting potential shutdown due to challenges stemming from water damage, fire incidents and personal losses, as well as licensing issues, conflicts and sound issues.
Some locations received monetary aid in modernizing infrastructure and gear that positively impacted artists and audiences.
"The concept that funds from concerts in big venues supports the smaller venues, where it kicks off for performers like me, is just common sense," Sam Fender has commented.
The musician is far from the only musician to contribute his Mercury Prize winnings to charitable organizations.
When Pulp received the prize in the year 1996 for their record Different Class, lead singer Cocker announced that the act would donate their winnings to the organization War Child.
During 2002, musician the artist divided her award among a few organizations, like the NSPCC and a charity for Sickle Cell.
"And I contributed a grand to the center, to their gymnastics program, because I did gymnastics when I was younger and they lacked updated gear," Ms Dynamite shared with outlets.
Previously, the band contributed their prize money to the local youth club that nurtured their band, in addition to other grassroots music organisations.
And 1994 winners they gave their winnings to a MS organization after a acquaintance was identified with the disease.
"Winning was quite enough," said vocalist Small. "The money was the cherry on top but we didn't need the bonus, because we had the cake. So our success affected another person's life."
Last week, the trust revealed it had protected two small stages in the South East, by placing them under public stewardship.
The Joiners in the city and the second in Bristol were acquired under the community ownership initiative, which is backed by the arts council and supporters who acquire "shares" in the venues.
